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It makes sense that some Central Banks have started to buy in the stock
markets for private corporations. After all, central banks have always held
the debt of their sovereigns, and this is just the reality of corporatism.

It is hard to figure out who might be more upset about this story: the US
stock bears, or the Israeli taxpayers.

Well, Stan Fischer, the Governor of the Bank of Israel, was Ben Bernanke's
mentor at MIT. Maybe he is just helping?

This adds a new dimension of flexibility to the Fed's swap lines with foreign
central banks.

The Bank of Israel will begin today a pilot program to invest a portion of
its foreign currency reserves in U.S. equities.

The investment, which in the initial phase will amount to 2 percent of the
$77 billion reserves, or about $1.5 billion, will be made through UBS AG
and BlackRock Inc. (BLK), Bank of Israel
spokesman Yossi Saadon said in a telephone
interview today. At a later stage, the investment is expected to increase to
10 percent of the reserves.

A small number of central banks have started investing part of their
reserves in equities. About 9 percent of the foreign- exchange
reserves of Switzerland’s central bank were invested in shares at the
end of the third quarter, the Swiss bank said on its website.

The investment will be made in equity index trackers and will include between
1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said.

The central bank decided to add equities to its investment portfolio in order
to diversify, reduce risk and give better
performance, Barry Topf, senior adviser to Governor
Stanley Fischer, said in a Dec. 1 interview.

Note: When they say 'Securities' on the balance sheet below, they mean debt
as in sovereign bonds. I don't know how theywillcharacterizeequities.